How Additions, Upgrades and Renovations Can Impact Homeowners Insurance Premiums

Regardless of how much you may love your home as it is, there may eventually come a time when you feel like making changes. Having children, addressing additional needs or simply wanting to enjoy a change in your daily lifestyle can all be understandable reasons why you might want to enhance your home. However, while augmenting or improving your home is an exciting choice, doing so requires you to account for a changing risk profile. Specifically, you’ll likely need to revisit your homeowners insurance.

Why Do Changes To Your Home Impact Insurance?

When considering upgrading your kitchen, adding to your home or even conducting more minor renovations, you should be aware that any changes could significantly impact your coverage needs. Homeowners insurance companies must carefully assess your property and personal risk profiles and determine your rates accordingly.

Additionally, upgrading your home typically also increases its value. As such, you’ll likely need higher coverage limits to ensure your maximum payout can provide sufficient financial aid in the event of a total loss. Recalculating policy limits may be particularly important when considering the 80% rule in homeowners insurance. This guideline essentially mandates that you carry at least 80% of the estimated rebuild cost of your home or potentially receive lower payouts even for more minor losses.

Can Changing My Policy Have Positive Effects on My Rates?

Indeed, while upgrading your home may often lead to a need for greater coverage and higher rates, specific enhancements may also actually help you enjoy lower costs. For example, adding a security system to your home or installing a steel roof could make you appear less risky to carriers, potentially leading to discounts.

We’re Here to Help

Regardless of your plans, you should work closely with your insurance agent when planning to make changes to your home. Keeping your insurer in the loop is essential to ensure that you maintain suitable coverage and do not unexpectedly face significant out-of-pocket losses down the road due to being underinsured.

Contact Goal Insurance in Taylorsville, Utah, today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.